H.R. 8009

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8009 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 8009

To amend the Higher Education Act of 1965 to provide for institutional 
ineligibility based on low cohort repayment rates and to require risk-
sharing payments of institutions of higher education.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 19, 2026

Mrs. Houchin (for herself and Ms. Perez) introduced the following bill; 
which was referred to the Committee on Education and Workforce

_______________________________________________________________________

A BILL

To amend the Higher Education Act of 1965 to provide for institutional 
ineligibility based on low cohort repayment rates and to require risk-
sharing payments of institutions of higher education.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Student Protection and Success 
Act''.

SEC. 2. INSTITUTIONAL INELIGIBILITY BASED ON LOW COHORT REPAYMENT RATE.

(a) In General.--Section 455 of the Higher Education Act of 1965 
(20 U.S.C. 1087e) is amended by adding at the end the following:
``(r) Ineligibility Due to Low Cohort Repayment Rate.--
``(1) In general.--Beginning with fiscal year 2028 and each 
succeeding fiscal year, an institution that has a cohort 
repayment rate that is equal to or less than 15 percent shall 
not be eligible to participate in a program under this part for 
such fiscal year and for the 2 succeeding fiscal years.
``(2) Appeals.--
``(A) In general.--An institution may appeal the 
loss of eligibility under this subsection to the 
Secretary within 30 days of receiving notification from 
the Secretary of the loss of eligibility under this 
subsection.
``(B) Continued participation.--During an appeal 
under subparagraph (A), the Secretary may permit the 
institution to continue to participate in a program 
under this part if the institution demonstrates to the 
satisfaction of the Secretary that the Secretary's 
calculation of its cohort repayment rate is not 
accurate, and that recalculation would increase its 
cohort repayment rate to be more than 15 percent.
``(C) Required payment.--If an institution 
continues to participate in a program under this part, 
and the institution's appeal of the loss of eligibility 
is unsuccessful, the institution shall be required to 
pay to the Secretary an amount equal to the amount of 
loans made by the Secretary under this part to 
borrowers attending, or planning to attend, that 
institution during the pendency of such appeal and the 
interest, special allowance, reinsurance, and any 
related payments made by the Secretary (or which the 
Secretary is obligated to make) with respect to such 
loans.
``(3) Cohort repayment rate.--
``(A) In general.--In this subsection, the term 
`cohort repayment rate' means, for any fiscal year 
beginning with fiscal year 2028--
``(i) in the case in which 30 or more 
borrowers at the institution enter repayment on 
Federal Direct Stafford Loans, Federal Direct 
Unsubsidized Stafford Loans, Federal Direct 
PLUS Loans, or Federal Direct Consolidation 
Loans, received for attendance at the 
institution, the percentage of those borrowers 
who are not in default and who make at least a 
one dollar reduction on their initial student 
loan principal balance before the end of the 
second fiscal year following the fiscal year in 
which the borrowers entered repayment, except 
as provided in subparagraph (B); and
``(ii) in the case in which less than 30 
borrowers at the institution enter repayment on 
Federal Direct Stafford Loans, Federal Direct 
Unsubsidized Stafford Loans, Federal Direct 
PLUS Loans, or Federal Direct Consolidation 
Loans, received for attendance at the 
institution, the percentage of those borrowers 
plus all of the borrowers at the institution 
who entered repayment on such loans (or on the 
portion of a loan made under section 428C that 
is used to repay any such loans) in the 3 
fiscal years preceding the fiscal year for 
which the determination is made, who are not in 
default and who make at least a one dollar 
reduction on their initial student loan 
principal balance before the end of the second 
fiscal year following the year in which the 
borrowers entered repayment, except as provided 
in subparagraph (B).
``(B) Exception.--The `cohort repayment rate' 
calculation under subparagraph (A) shall not include in 
the calculation a borrower who is--
``(i) in deferment on repayment of a loan 
described in subparagraph (A) due to study in 
an approved graduate fellowship program or in 
an approved rehabilitation training program for 
the disabled;
``(ii) in deferment on repayment of a loan 
described in subparagraph (A) during a period 
of at least half-time enrollment in college or 
a career school;
``(iii) in deferment on repayment of a loan 
described in subparagraph (A) during a period 
of service qualifying for loan discharge or 
cancellation under part E;
``(iv) in deferment on repayment of a loan 
described in subparagraph (A) due to active 
duty military service of the borrower during a 
war, military operation, or national emergency;
``(v) in deferment on repayment of a loan 
described in subparagraph (A) during the 13 
months following the conclusion of qualifying 
active duty military service by the borrower, 
or until the borrower returns to enrollment on 
at least a half-time basis, whichever is 
earlier, if the borrower is a member of the 
National Guard or other reserve component of 
the Armed Forces and was called or ordered to 
active duty while enrolled at least half-time 
at an eligible school or within 6 months of 
having been enrolled at least half-time;
``(vi) in mandatory forbearance on 
repayment of a loan described in subparagraph 
(A) for the full fiscal year; or
``(vii) serving as a volunteer under the 
Peace Corps Act (22 U.S.C. 2501 et seq.) or the 
Domestic Volunteer Service Act of 1973 (42 
U.S.C. 4950 et seq.).
``(C) Publication of repayment rates.--The 
Secretary shall publish the cohort repayment rates for 
institutions determined under this subsection.
``(4) Notification.--Beginning with the first fiscal year 
for which data are available after the date of enactment of the 
Student Protection and Success Act and each succeeding fiscal 
year until fiscal year 2028, the Secretary shall notify each 
institution that has a cohort repayment rate that is equal to 
or less than 15 percent that the institution risks losing 
eligibility to participate in a program under this part.''.
(b) Ineligibility in Other Programs.--
(1) Pell grants.--Section 401(j) of the Higher Education 
Act of 1965 (20 U.S.C. 1070a(j)) is amended--
(A) in the heading, by striking ``Based on Default 
Rates'';
(B) in paragraph (1), by inserting ``until fiscal 
year 2028'' after ``succeeding fiscal year'';
(C) in paragraph (2), by inserting ``or cohort 
repayment rate determination'' after ``default rate 
determination''; and
(D) by adding at the end the following:
``(3) Ineligibility based on low cohort repayment rates.--
No institution of higher education shall be an eligible 
institution for purposes of this subpart if such institution of 
higher education is ineligible to participate in a program 
under part D due to a low cohort repayment rate, as determined 
under section 455(r).''.
(2) Student loan insurance program.--Section 435(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1085(a)) is amended--
(A) in paragraph (2)--
(i) in the heading, by striking ``based on 
high default rates'';
(ii) in subparagraph (A), by striking ``An 
institution'' and inserting ``Until fiscal year 
2028, an institution''; and
(iii) by adding at the end the following:
``(E) No institution of higher education shall be an 
eligible institution for purposes of this part if such 
institution of higher education is ineligible to participate in 
a program under part D due to a low cohort repayment rate, as 
determined under section 455(r).''; and
(B) in paragraph (6)(A), by inserting ``and until 
fiscal year 2028,'' after ``July 1, 1999,''.
(3) Federal perkins loans.--Section 462 of the Higher 
Education Act of 1965 (20 U.S.C. 1087bb) is amended--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``or the 
institution is ineligible to participate in a 
program under part D due to a low cohort 
repayment rate, as determined under section 
455(r)'' after ``subsection (f)''; and
(ii) in paragraph (2)(D), by inserting ``or 
the institution is ineligible to participate in 
a program under part D due to a low cohort 
repayment rate, as determined under section 
455(r)'' after ``subsection (f)'';
(B) in subsection (b)--
(i) in paragraph (2), by inserting ``or the 
institution is ineligible to participate in a 
program under part D due to a low cohort 
repayment rate, as determined under section 
455(r)'' after ``subsection (f)''; and
(ii) in paragraph (3), by inserting ``or 
the institution is ineligible to participate in 
a program under part D due to a low cohort 
repayment rate, as determined under section 
455(r)'' after ``subsection (f)'';
(C) in subsection (e)--
(i) in paragraph (2), by inserting ``until 
fiscal year 2028,'' after ``succeeding fiscal 
year''; and
(ii) in paragraph (3)--
(I) in subparagraph (A), by 
inserting ``until fiscal year 2028,'' 
after ``any succeeding fiscal year''; 
and
(II) by adding at the end the 
following:
``(F) Low cohort repayment rates.--An institution 
that is ineligible to participate in a program under 
part D due to a low cohort repayment rate, as 
determined under section 455(r), shall not be eligible 
to participate in a program under this part.''; and
(D) in subsection (f)(2), by inserting ``until 
fiscal year 2028,'' after ``subsequent years''.

SEC. 3. COLLEGE OPPORTUNITY BONUS PROGRAM.

Subpart 1 of part A of title IV of the Higher Education Act of 1965 
(20 U.S.C. 1070a et seq.) is amended by adding at the end the 
following:

``SEC. 401B. COLLEGE OPPORTUNITY BONUS PROGRAM.

``(a) Program Authority.--
``(1) In general.--Beginning with fiscal year 2028 and each 
succeeding fiscal year, the Secretary shall award grants to 
eligible institutions of higher education that are distributed 
under a formula determined by the Secretary under subsection 
(d).
``(2) Eligible institution.--In this section, the term 
`eligible institution of higher education' means an institution 
of higher education that has a cohort repayment rate (as 
defined in section 455(r)(3)) that is greater than 25 percent.
``(b) Grants.--The Secretary shall award grants to eligible 
institutions of higher education that the Secretary determines have a 
strong record of making college more affordable and increasing college 
access and success for low-income and moderate-income students.
``(c) Uses of Funds.--Each eligible institution of higher education 
that receives a grant under this section may use the grant funds to 
support reforms to further increase college access and success for low- 
and moderate-income students, by making key investments and adopting 
best practices, including by considering best practices reported under 
section 5 of the Student Protection and Success Act, and by--
``(1) awarding additional need-based financial aid to 
students enrolled at the institution who are eligible to 
receive a Federal Pell Grant;
``(2) enhancing academic and student support services; and
``(3) establishing or expanding accelerated learning 
opportunities.
``(d) Amount of Grant Funds.--
``(1) In general.--Each eligible institution of higher 
education that receives a grant under this section shall 
receive annual grant funds based on a formula determined by the 
Secretary that equally considers--
``(A) the number and percentage of students 
enrolled at the institution who are eligible to receive 
a Federal Pell Grant;
``(B) the cohort repayment rate (as defined in 
section 455(r)(3)) of students enrolled at the 
institution who are eligible to receive a Federal Pell 
Grant; and
``(C) the institution's student service 
expenditures as a percentage of the institution's 
student service resources.
``(2) Cap.--Each eligible institution of higher education 
that receives a grant under this section shall receive grant 
funds for a fiscal year in an amount that is not more than 2.5 
percent of the amount equal to the eligible institution's total 
annual revenues and investment returns less auxiliary 
enterprise revenues and hospital revenues, as defined in the 
IPEDS Finance Survey, for the most recent fiscal year upon 
which the eligible institution's audited financial reports are 
available.
``(e) Supplement Not Supplant.--Funds made available under this 
section shall be used to supplement, and not supplant--
``(1) other State funds that States would otherwise expend 
to carry out activities under this section to improve college 
affordability and graduate additional low- and moderate-income 
students; and
``(2) institutional funds that eligible institutions of 
higher education receiving a grant under this section would 
otherwise expend to carry out activities under this section to 
improve college affordability and graduate additional low- and 
moderate-income students.
``(f) Funding.--The grant program under this section shall be 
funded only with risk-sharing payments received by the Secretary under 
section 454(d).''.

SEC. 4. RISK-SHARING PAYMENTS.

Section 454 of the Higher Education Act of 1965 (20 U.S.C. 1087d) 
is amended--
(1) in subsection (a)--
(A) in paragraph (6), by striking ``and'' after the 
semicolon;
(B) in paragraph (7), by striking the period at the 
end and inserting ``; and''; and
(C) by adding at the end the following:
``(8) provide that the institution accepts the 
institutional risk-sharing requirements under subsection (d), 
if applicable.''; and
(2) by adding at the end the following:
``(e) Institutional Risk-Sharing Based on Cohort Nonrepayment Loan 
Balances.--
``(1) In general.--Beginning with fiscal year 2028 and each 
succeeding fiscal year, each institution of higher education 
participating in the direct student loan program under this 
part shall remit to the Secretary, at such times as the 
Secretary may specify, a risk-sharing payment based on the 
cohort nonrepayment loan balance of the institution, as 
determined under paragraph (2).
``(2) Determination of risk-sharing payments.--
``(A) Determination of cohort loan balance.--The 
cohort loan balance of an institution for a fiscal year 
equals the total principal amount of all loans made 
under this part to attend such institution for the 
cohort of borrowers who entered repayment, deferment, 
or forbearance on such loans in the third preceding 
fiscal year for which the determination is made.
``(B) Determination of cohort nonrepayment loan 
balance.--
``(i) In general.--The cohort nonrepayment 
loan balance of an institution for a fiscal 
year equals, from the total amount of the loans 
described in subparagraph (A), the total loan 
balance of those borrowers who have not made at 
least a 1 dollar reduction in their principal 
balance in the 3 consecutive fiscal years since 
their loans entered repayment, deferment, or 
forbearance.
``(ii) Exception.--The cohort nonrepayment 
loan balance calculation under clause (i) shall 
not take into consideration a borrower who 
was--
``(I) in deferment on repayment of 
a loan described in subparagraph (A) in 
the 3 consecutive fiscal years 
described in clause (i) due to study in 
an approved graduate fellowship program 
or in an approved rehabilitation 
training program for the disabled;
``(II) in deferment on repayment of 
a loan described in subparagraph (A) in 
the 3 consecutive fiscal years 
described in clause (i) during which 
time the borrower was in a period of at 
least half-time enrollment in college 
or a career school;
``(III) in deferment on repayment 
of a loan described in subparagraph (A) 
in the 3 consecutive fiscal years 
described in clause (i) during which 
time the borrower was in a period of 
service qualifying for loan discharge 
or cancellation under part E;
``(IV) in deferment on repayment of 
a loan described in subparagraph (A) in 
the 3 consecutive fiscal years 
described in clause (i) during which 
time the borrower was on active duty 
military service during a war, military 
operation, or national emergency;
``(V) in mandatory forbearance on 
repayment of a loan described in 
subparagraph (A) for the full fiscal 
year; or
``(VI) serving as a volunteer under 
the Peace Corps Act (22 U.S.C. 2501 et 
seq.) or the Domestic Volunteer Service 
Act of 1973 (42 U.S.C. 4950 et seq.), 
during the 3 consecutive fiscal years 
described in clause (i).
``(C) Determination of payment.--
``(i) In general.--
``(I) In general.--Except as 
provided in subclause (II), the risk-
sharing payment of an institution for a 
fiscal year equals 2 percent of the 
amount determined under clause (ii).
``(II) Cap.--The risk-sharing 
payment of an institution for a fiscal 
year shall not be more than 2.5 percent 
of the amount equal to the 
institution's total annual revenues and 
investment returns less auxiliary 
enterprise revenues and hospital 
revenues, as defined in the IPEDS 
Finance Survey, for the most recent 
fiscal year upon which the 
institution's audited financial reports 
are available.
``(ii) Amount based on cohort nonrepayment 
loan balance and unemployment rate.--
``(I) In general.--The amount under 
this clause is determined by 
subtracting the amount determined under 
subclause (II) from the cohort 
nonrepayment loan balance determined 
under subparagraph (B).
``(II) Amount based on unemployment 
rate.--The amount under this subclause 
is determined by multiplying the 
average national unemployment rate, as 
defined by the Bureau of Labor 
Statistics, for the 3 previous fiscal 
years from the date of the 
determination by the cohort loan 
balance determined under subparagraph 
(A).
``(3) Notification.--Beginning with the first fiscal year 
for which data are available after the date of enactment of the 
Student Protection and Success Act and each succeeding fiscal 
year until fiscal year 2028, the Secretary shall notify each 
institution of higher education participating in the direct 
student loan program under this part of what the risk-sharing 
payment based on the cohort nonrepayment loan balance of the 
institution, as determined under paragraph (2), would be for 
such institution if such provision were in effect.''.

SEC. 5. REPORT.

Not later than 6 months after the date of enactment of the Student 
Protection and Success Act, the Secretary of Education shall submit to 
Congress a report--
(1) on best practices for institutions of higher education 
to improve repayment rates; and
(2) that makes recommendations on how institutions of 
higher education can improve repayment rates, with a particular 
emphasis on institutions that serve a high proportion of low-
income students.

SEC. 6. STUDENT SERVICE EXPENDITURES AND RESOURCES.

Section 153(a)(1)(I) of the Education Sciences Reform Act of 2002 
(20 U.S.C. 9543(a)(1)(I)) is amended to read as follows:
``(I) the financing and management of education, 
including data on revenues and expenditures, and 
information regarding--
``(i) student service expenditures, that--
``(I) includes instruction, 
information technology, and other 
activities whose primary purpose is to 
contribute to students' emotional and 
physical well-being and to their 
intellectual, cultural, and social 
development inside and outside the 
context of the formal instructional 
program; and
``(II) does not include 
expenditures on marketing, recruitment, 
or intercollegiate athletic programs;
``(ii) student service resources, which is 
a measure of an institution's resources that 
could reasonably be allocated towards student 
service expenditures, including net tuition 
revenues, State and local appropriations, 
endowment income, and revenues related to 
student housing and food services less 
expenditures on student housing, food services, 
and the operations and maintenance of a plant; 
and
``(iii) recruitment and marketing 
expenditures;''.
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